91998E0085

WRITTEN QUESTION E-0085/98 by Carlos Robles Piquer (PPE) to the Commission (30 January 1998)

Subject: Taiwan's financial situation and Taipei office

During the financial crisis which has hit the Asian financial markets in the past few months, one country has formed a shining exception to the rule i.e. Taiwan. Its economy appears to have weathered the storm unaffected.

Can the Commission explain this admirable exception? Also, does it not think that this constitutes an additional reason, in Europe's interest, to find the necessary funding in the 1998 Budget for an information office as referred to in the written question by Mr Dupuis (P-1432/97) of 16 April 1997 and in the reply by Sir Leon Brittan (13 May 1997) published in the OJ of 4 December 1997 ((OJ C 367, 4.12.1997, p. 125. ))?

Answer given by Sir Leon Brittan on behalf of the Commission (12 March 1998)

Whilst Taiwan is not the only Asian country to emerge relatively unscathed so far by the Asian financial crisis, its resilience in the face of severe turmoil has indeed been impressive. There appear to be several reasons for this. Firstly, Taiwan's banks are relatively unexposed in Asia compared to those of neighbouring countries. Its investments in Asia tend to take the form of industrial plants, many of which may indeed benefit from the turmoil by exporting from countries with newly devalued currencies. This would help Taiwanese companies counterbalance any potential loss of competitiveness from their operations in mainland China.

Secondly, the healthy running of the Taiwanese economy - including sound financial management (leaving the treasury with some $82 billion of foreign currency reserves), transparency and a growing degree of democratic control - will have helped Taiwan sustain investor confidence.

Taiwan's response to the crisis, too, has been to open up its economy further rather than close it off. It should not be forgotten, however, that Taiwan did not escape the turmoil altogether. Its currency dipped to a ten-year low against the US dollar, while the stock market fell to its lowest level for almost two years.

The Commission believes that an office, operating along similar informal lines to the trade offices of many Member States there, would help promote European economic and trade interests in Taiwan, not least in view of the significant progress made recently in the negotiations for a bilateral Community-Taiwan market access package. It therefore considers important that such an office be opened as soon as possible, depending on an evaluation of the Commission's priorities for the development of its network of external representations. This in turn will depend on the overall availability of human and financial resources.